BlackRock sees no role for investors in ‘policing’ net zero targets

Larry Fink, chairman of investment giant BlackRock, the largest asset manager in the world, has stuck to his guns on a belief that climate risk is directly material to financial matters.

The finance veteran also insisted that it is regulators not investors that should be playing the role of “environmental policeman.”

The comments were made in Fink’s annual letter to CEOs, in which he quoted findings from Munich Re which showed insurers had to cover $120bn for natural catastrophes in 2022, according to Fink “a once unthinkable figure.”

The letter could also be seen as an act of avoidance, with the term ESG not mentioned once in the 9,000 word letter, though neither was it referred to in Fink’s 2022 letter. 

The decisions in recent months by states such as Texas, Kentucky and Florida to put forward legislation divesting pension funds from ‘woke’ investment managers, with BlackRock in some cases called out specifically, were also not mentioned in the 2023 address.

Fink did mention that “anyone can see the impact of climate change in the natural disasters in California or Florida”, which hammers home an irony that it is Florida’s Governor Ron DeSantis who is leading the anti-ESG charge.

Fink said: “The transition to a low-carbon economy is top of mind for many of our clients. Our clients have a range of investment objectives and perspectives. We have clients who want to invest in ways that seek to align with a particular transition path or to accelerate that transition.

“We have clients who choose not to. We offer choice to help clients reach their investment goals, and we manage their assets consistent with their objectives and guidelines.”

Earlier this month, BlackRock announced plans to ramp up the amount of products and services it offers to help investors “navigate, drive and invent” the transition to net zero.

BlackRock is currently estimated to have $8trn in assets under management.